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Investigations

Tennessee Contractor Sentenced for Theft of Federal Funds

On July 15, 2014, Michael W. Young, Clermont, Florida, was sentenced in U.S. District Court, Nashville, Tennessee, to two years in prison for stealing $974,000 from federally funded state roadway projects, and for laundering funds derived from that crime. He was also ordered to pay over $221,000 to the State of Tennessee as restitution, which is the balance of stolen funds that were not previously recovered from Young.

Young admitted that from 2004 to 2012, he was employed as a contract agent for the State of Tennessee to purchase property rights of way for road expansion projects planned by the Tennessee Department of Transportation (TDOT), with funding provided by the United States. Upon being advised by Young that the property owners were agreeable to sell the rights of way, TDOT would send a check to him in the amount required for the transaction. Young admitted that instead of using these funds to buy property for the State of Tennessee, he began diverting funds starting in 2004. He used the funds for personal and business expenses. He would use funds from subsequent right of way transactions to pay for previous transactions, in a fashion typical to a “pyramid” scheme. He admitted doing this until 2012 when an audit disclosed the thefts.

We conducted this investigation with the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigations, with assistance from the TDOT Internal Audit Division.